London close
After all the excitement and drama in Greece and China over the last week or two investors decided it was time for a breather.
The FTSE 100 finished unchanged at 6,754, after some mixed economic data.
Wage growth was slightly lower than the forecast 5 year high of 3.3%, but was still at a healthy 3.2%.
Jobless claims, however, increased instead of falling, and the unemployment rate lifted away from its 7 year low to 5.6%.
On the corporate front, swanky fashion house Burberry (LON:BRBY) reported higher first quarter revenue and sales but said Asia and Hong Kong dragged on the numbers. Shares eased 42p to 1,578p.
Moving the other way was Centrica (LON:CNA), which said its British Gas unit would be cutting gas prices by 5% next month.
Among the mid-caps, JD Wetherspoon (LON:JDW) chairman Tim Martin used the company’s trading update to attack the governments new ‘living wage’ scheme.
The pub chain warned that annual profit was unlikely to top last year's, due to higher pub running costs. Shares dropped 9,4% to 713p.
Peppa Pig media company Entertainment One (LON:ETO) took a tumble, shedding 9.1% as investment group Marwyn slashed its stake in the company from 26.9% to 17.9%.
Meanwhile, Lonmin (LON:LMI) was the beneficiary of an upgrade to ‘neutral’ from ‘sell’ by blue-chip broker Goldman Sachs. Shares climbed 6.2% to 81.35p.
An agreed takeover had the share price of AGA Rangemaster (LON:AGA) heating up nicely. The bid came in from US group Middleby Group at 185p a share, which was enough to win the backing of the AGA board and send the cooker maker's shares up 30.25p to 182.25p.
Savannah Petroleum (LON:SAVP), up 8.2% at 42.75p, was wanted after FIL lifted its stake above 5% to 5.55%, having purchased some 7mln shares earlier this week.
Leading the fallers was Rurelec (LON:RUR) as the company said a US$12mln bridging loan has been suspended pending clarification on the security and repayment of the facility, if taken. Shares dropped 28.6% to 1.88p.
US open
US markets were in wait-and-see mode as Federal Reserve boss Janet Yellen got set to address law makers in the US Congress today.
Yellen stuck to a well-worn script in testimony released ahead of the meeting in Congress, saying that the Fed would start lifting interest rates “at some point this year”.
The Dow Jones was off four points at 18, 050 after half an hour of trading, but the S&P 500 was a point firmer at 2,110 and the Nasdaq Composite was 16 points to the good at 5,121.
Industrial production rose 0.3% in June, which was better than the 0.1% rise economists had anticipated.
While waiting for Yellen to dispense her wisdom, investors have the banking results season to occupy them, with Bank of America at the crease today.
The North Carolina-based bank saw post-tax profit soar to US$5.32bn in the second quarter from US$2.29bn the year before.
Earnings per share of 45 cents were comfortably ahead of analysts' expectations of 36 cents.
Wealth management titan Blackrock also reported earnings that were ahead of expectations.
Biotech group Celgene Corp (NASDAQ:CELG) has made an agreed US$7.2bn takeover offer to rival Receptos.
Celgene offered $232 a share for Receptos, which has an experimental pill treatment for bowel disease and relapsing multiple sclerosis known as Ozanimod.
Celgene said the deal would give it a transformational chance to develop treatments for several therapeutic areas.
On the downside, Yum Brands were left on the plate after the fast-food chain operator's lacklustre earnings release after the bell yesterday.
Back in Blighty, the top-share index is also seeking direction, with a four point decline to 6,750 largely down to Burberry (LON:BRBY), which is friendless after its trading update betrayed signs of slowing sales momentum.
Lunchtime Report
The UK’s main index struggled to make headway by lunch as investors cautiously awaited announcements due later in the day.
First up is Federal Reserve chair Janet Yellen, who is addressing congress in the US at 2pm GMT.
“Investors will be looking for firmer signs on whether an interest rate lift-off will occur in September, as well as details on the size of the USA’s second quarter recovery following its weak opening to 2015” Connor Campbell at Spreadex said.
Later on this evening, Greece prime minister Alexis Tsipras has the unenviable task of trying to push his latest funding deal with creditors through parliament.
Alastair McCaig at IG said: “Almost nothing has been straightforward in this Greek drama, but Mr Tsipras’ admission that he signed a text he doesn’t believe in is sure to rile locals fresh from a referendum that categorically voted against any such action.”
Investors across Europe were cautious ahead of the events, with the German Dax gaining a very moderate 16 points to 11,533 while the Paris-based Cac 40 inched 8 points ahead to 5,040.
In the UK, the FTSE 100 was equally as flat, eking out a 12 point gain with UK jobs data coming in more mixed than expected.
Wage growth was slightly lower than the forecast 5 year high of 3.3%, but was still at a healthy 3.2%.
Jobless claims, however, increased instead of falling, and the unemployment rate lifted away from its 7 year low to 5.6%.
On the corporate front, miners were higher today with Anglo American (LON:AAL) leading the way higher after an upbeat note from Credit Suisse.
The broker boosted its rating on the shares to 'outperform' from 'neutral', sending shares 2.9% higher at 894p.
Fresnillo (LON:FRES) gaining 2.3% to 692p and Rio Tinto (LON:RIO) up 2% to 2,629p rounded out the top three.
At the other end of the index, upmarket fashion house Burberry (LON:BRBY) reported higher first quarter revenue and sales but said Asia and Hong Kong dragged on the numbers. Shares eased 28p to 1,592p.
Moving away from the FTSE 100, JD Wetherspoon (LON:JDW) chairman Tim Martin used the company’s trading update to attack the governments new ‘living wage’ scheme.
The pub chain warned that annual profit was unlikely to top last year's, due to higher pub running costs. Shares dropped 7.5% to 713p.
Meanwhile, Lonmin (LON:LMI) was the beneficiary of an upgrade to ‘neutral’ from ‘sell’ by blue-chip broker Goldman Sachs. Shares climbed 8.5% to 83.9p.
In the world of small caps, Oilex (LON:OEX) raised the first A$1.8mln of a planned A$30mln funding for its exploration programme in India. Shares climbed almost 10% to 2.19p.
Meanwhile the biggest gainer of the day was Mosman Oil and Gas (LON:MSMN) up 41% to 2.8p.
There is no news out at the moment and typically Internet bulletin boards saw speculation and naturally enough a spiky comment or two.
Leading fallers was Rurelec (LON:RUR) as the company said a US$12mln bridging loan has been suspended pending clarification on the security and repayment of the facility, if taken. Shares dropped 26% to 1.9p.
Most followed
There is news from areas other than Greece this morning, so let’s start with British Gas, which is cutting its prices.
The utility company, owned by FTSE 100 heavyweight Centrica (LON:CNA), has announced plans to cut household gas prices by 5%, which would save the average household £35 a year on its energy bills.
The new tariffs come into effect on 27 August, and follow a 25% fall in wholesale prices since December of last year; British Gas customers don’t get the full 25% cut, partly because British Gas cut its prices in January and partly because … well, that’s how these things go.
Reaching into my box of tenuous links, we move on from British Gas to cookers group AGA Rangemaster (LON:AGA), which is the subject of an agreed bid by Middleby, which describes itself as “an experienced acquirer of businesses”.
Middleby is offering 185p in cash for AGA, which values the company at £129mln. A month or so ago AGA’s shares were languishing at 104p before news of bid talks broke.
The board of AGA has given the bid the thumbs up, and Middleby revealed that shareholders representing 19.1% of the issued share capital are on board, so this bid looks far from half-baked.
The clear-out at the top at lender Barclays (LON:BARC) continues, with deputy chairman Sir Mike Rake on his way to payments processing firm Worldpay, where he is set to be the new chairman.
At least he seems to be going voluntarily, which is reportedly more than can be said for Antony Jenkins, the former chief executive officer who was turfed out by chairman John McFarlane last week.
Fashion chain Burberry (LON:BRBY) seems to have lost its golden touch, at least in Hong Kong, where it is seeing subdued demand.
On the plus side, things are going better in Europe, and overall the group reported an 8% year-on-year underlying increase in retail sales.
In small cap news, Afren (LON:AFR) has asked for trading in its shares to be suspended, as it is unable to assess accurately its financial position after realising that near-term production levels would fall significantly below expectations.
There was happier news for sector peer Tower Resources (LON:TRP), which has raised £5.2mln in an oversubscribed placing.
The funds will finance its new project off the coast of Cameroon.
London Open
London’s blue chip stocks opened very flat as investors wait to find out if Greece’s bailout terms will be passed through its parliament.
The vote, due at 8pm GMT, is expected to be passed, however reports suggest International Monetary Fund (IMF) chair Christine Lagarde has threatened to scupper the Greece bailout deal.
"The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date,” said the IMF in a confidential report.
The uncertainty has hovered over markets, and Bernard Aw at IG says there is “there is still an evenly split risk of the deal falling apart.”
Meanwhile, in the USA Federal Reserve chair Janet Yellen is to address Congress later on today.
The Fed chair said last Friday that she expects to raise interest rates this year, and reiterated that the pace of increases will be gradual.
In the UK, the FTSE 100 opened 2 points lower to 6,751 with Burberry (LON:BRBY) holding the index back.
The upmarket fashion house reported higher first quarter revenue and sales but said Asia and Hong Kong dragged on the numbers. Shares eased 26p to 1,594p.
Away from the index, Entertainment One (LON:WTO) was a big faller after Marwyn Value Investors sold 9% of the company at 330p per share via a placing.
Shares had been above 360p but slipped back on the news, sitting at 326p this morning, 10% lower than yesterday’s close.
Meanwhile, JD Wetherspoon (LON:JDW) chairman Tim Martin used the company’s trading update to attack the governments new ‘living wage’ scheme.
He said it gives supermarkets a further advantage and said it is “putting unsustainable pressure on many pubs.” Shares dropped 6% to 724p.
Meanwhile, AGA Rangemaster Group (LON:AGA) has agreed to be taken over by US kitchen product company Middleby for £129mln. Shares climbed 19.4% to 181p.
In small caps, rugby club Saracens chairman Nigel Wray, increased his stake in e-sports competition expert Gfinity (LON:GFIN) above 14%. Shares rose more than 5% to 23p.
The big gainer of the morning was Mosman Oil and Gas (LON:MSMN) up 55% to 3p.
There is no news out at the moment and typically Internet bulletin boards saw speculation, guesstimation and naturally enough a spiky comment or two.
For now, let’s just say there are more buyers than sellers.
Leading the morning’s fallers was Black Sea Property (LON:BKSA) which lost 33% to 0.1p.
The fund is to raise £1.5mln before expenses through a placing of 152,000,000 new ordinary shares at 1p per share. Shares will be suspended from tomorrow.
Market Preview
London’s blue chips are set for a steady start ahead of a string of economic updates around the world later in the day.
Financial spread bet firms see FTSE 100 adding around five points when dealing gets underway to add to the 16-point rise seen Tuesday to close at 6,754.
As has been the case for much of this week, the UK is a bystander to the global events driving the markets.
Janet Yellen, the chair of the US Federal Reserve, gives a speech to Congress today with any hint on the timing of any interest rate rise to be the market’s main focus.
Recent economic data has been inconclusive with below par jobs and retail sales data enough to give the Fed some wriggle room if it wants to hold back according to many economists.
US markets had a decent day with the Dow Jones Industrial Average up 76 points to 18,054 with gains also for Nasdaq and the S&P 500.
Greece continues to cast a shadow with the cracks after the weekend’s deal with its creditors widening further.
Greek PM Alexis Tsipras has now admitted he doesn’t believe in the deal even though he signed it.
One of its main creditors, the IMF, meanwhile is also on a collision course with Germany after it said the terms may be too harsh and Greece has to have a chance to get out of its debt grip.
China also published economic statistics. The economy grew by 7% in the second quarter according to the latest official statistics, but scepticism over the numbers meant that shares in both Shanghai and Hong Kong both fell.
A statement from the Chinese statistics agency defending the accuracy of the figures did little to help as markets tumbled again.
Tokyo in contrast made decent gains.
UK company news sees updates from Burberry and bike group Halfords.
Luxury clothes brand Burberry (LON:BRBY) faces a turbulent week as one group has advised shareholders to vote against chief executive Christopher Bailey's pay at the AGM on Thursday.
He was awarded a £7.9mln package last year.
Meanwhile, in terms of first quarter numbers, broker Hargreaves Lansdown reckon it will post sales up by between 6% and 7% compared with 9% rise at the previous half-year.